1.1 	A bill for an act
1.2 	relating to education finance; increasing the equalizing factors for the debt 
1.3 	service equalization aid and referendum equalization aid programs; indexing 
1.4 	the equalizing factors; amending Minnesota Statutes 2004, sections 123B.53, 
1.5 	subdivisions 4, 5; 126C.01, by adding subdivisions; 126C.17, subdivision 6.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2004, section 123B.53, subdivision 4, is amended to read:
1.8 		Subd. 4.Debt service equalization revenue. (a) The debt service equalization 
1.9 	revenue of a district equals the sum of the first tier debt service equalization revenue and 
1.10 	the second tier debt service equalization revenue.
1.11 	(b) The first tier debt service equalization revenue of a district equals the greater 
1.12 	of zero or the eligible debt service revenue minus the amount raised by a levy of 15 10
1.13 	percent times the adjusted net tax capacity of the district minus the second tier debt service 
1.14 	equalization revenue of the district.
1.15 	(c) The second tier debt service equalization revenue of a district equals the greater 
1.16 	of zero or the eligible debt service revenue, excluding alternative facilities levies under 
1.17 	section  123B.59, subdivision 5, minus the amount raised by a levy of 25 20 percent times 
1.18 	the adjusted net tax capacity of the district. 

1.19 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008. 

1.20 	Sec. 2. Minnesota Statutes 2004, section 123B.53, subdivision 5, is amended to read:
1.21 		Subd. 5.Equalized debt service levy. (a) The equalized debt service levy of a 
1.22 	district equals the sum of the first tier equalized debt service levy and the second tier 
1.23 	equalized debt service levy.
2.1 	(b) A district's first tier equalized debt service levy equals the district's first tier debt 
2.2 	service equalization revenue times the lesser of one or the ratio of:
2.3 	(1) the quotient derived by dividing the adjusted net tax capacity of the district for 
2.4 	the year before the year the levy is certified by the adjusted pupil units in the district for 
2.5 	the school year ending in the year prior to the year the levy is certified; to
2.6 	(2) $3,200 $5,000 times the equalizing factor adjustment under section 126C.01, 
2.7 	subdivision 12.
2.8 	(c) A district's second tier equalized debt service levy equals the district's second 
2.9 	tier debt service equalization revenue times the lesser of one or the ratio of:
2.10 	(1) the quotient derived by dividing the adjusted debt service net tax capacity of the 
2.11 	district for the year before the year the levy is certified by the adjusted pupil units in the 
2.12 	district for the school year ending in the year prior to the year the levy is certified; to
2.13 	(2) $8,000 times the equalizing factor adjustment under section 126C.01, subdivision 
2.14 	12.

2.15 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008. 

2.16 	Sec. 3. Minnesota Statutes 2004, section 126C.01, is amended by adding a subdivision 
2.17 	to read:
2.18 		Subd. 12.Net tax capacity equalizing factor adjustment. The net tax capacity 
2.19 	equalizing factor adjustment equals the greater of one or the ratio of the statewide net 
2.20 	tax capacity for the most recent assessment year divided by the statewide adjusted 
2.21 	marginal cost pupil units for the third subsequent year to the statewide net tax capacity 
2.22 	for assessment year 2004 divided by the statewide adjusted marginal cost pupil units 
2.23 	for fiscal year 2007. 

2.24 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008.

2.25 	Sec. 4. Minnesota Statutes 2004, section 126C.01, is amended by adding a subdivision 
2.26 	to read:
2.27 		Subd. 13.Referendum market value equalizing factor adjustment. The 
2.28 	referendum market value equalizing factor adjustment equals the greater of one or the ratio 
2.29 	of the statewide referendum market value for the most recent assessment year divided 
2.30 	by the statewide adjusted marginal cost pupil units for the third subsequent year to the 
2.31 	statewide referendum market value for assessment year 2004 divided by the statewide 
2.32 	adjusted marginal cost pupil units for fiscal year 2007. 

2.33 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008. 

3.1 	Sec. 5. Minnesota Statutes 2004, section 126C.17, subdivision 6, is amended to read:
3.2 		Subd. 6.Referendum equalization levy. (a) For fiscal year 2003 and later,
3.3 	A district's referendum equalization levy equals the sum of the first tier referendum 
3.4 	equalization levy and the second tier referendum equalization levy.
3.5 	(b) A district's first tier referendum equalization levy equals the district's first tier 
3.6 	referendum equalization revenue times the lesser of one or the ratio of the district's 
3.7 	referendum market value per resident marginal cost pupil unit to $476,000 $650,000 times 
3.8 	the equalizing factor adjustment under section 126C.01, subdivision 13.
3.9 	(c) A district's second tier referendum equalization levy equals the district's second 
3.10 	tier referendum equalization revenue times the lesser of one or the ratio of the district's 
3.11 	referendum market value per resident marginal cost pupil unit to $270,000.

3.12 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008.